Earth Day comes around once a year, but investors can put their money to work to combat climate change year-round.
As more individuals come to terms with the existential threat of climate change, sustainable investing is no longer niche. It's gone mainstream, and it's a growing force in the capital markets.
An often cited 2019 survey from Morgan Stanley found that 85 percent of investors with at least $100,000 in investable assets were interested in sustainable investing.
Some 48 percent of investors with $10,000 or more invested said they were "very or somewhat" interested in sustainable investment funds, according to a 2022 Gallup poll. But only 25 percent said they'd heard "a lot or fair amount" about it, and only 10 percent said they were currently invested in sustainable funds.
Not only is familiarity with sustainable investing low, concepts like ESG can be confusing. ESG refers to "environmental, social, and governance." It's a set of standards used to evaluate companies through a social lens, but a study from Stanford University found ESG ratings can be unreliable because there isn't a standardized criteria for evaluation, information gathering is expensive, and data can be incomplete or unreliable.
Peter Krull, a partner and director of sustainable investing at Prime Capital Investment Advisors company Earth Equity Advisors, echoed those concerns.
"An ESG portfolio that reduces its exposure to ExxonMobil is less bad. One that eliminates it entirely is better. But one that replaces it with First Solar is actually sustainable," Krull told Cheddar News.
Krull recommended sustainable investors eliminate fossil fuel companies or funds that contain them from their portfolios altogether, but other sectors aren't so cut and dried. Mining operations, for example, can mine fossil fuels, but they can also mine minerals for electric vehicle batteries. As for what goes into a green portfolio, Krull recommended alternative energy companies that focus on solar, wind, and geothermal power, as well as less obvious choices like insurance companies that consider climate risk and biotech that improves health outcomes.
"I like to call traditional index investing rearview mirror investing because it's really about investing in where we've been or where the economy has been. Whereas sustainable investing is where the economy is going," Krull said.
Being a smart and sustainable investor can require a great deal of critical thinking and research, and Krull recommended tools like Fossil Free Funds and Invest Your Values to help sort through the noise.
Ultimately, investing is about generating a return. When it comes to sustainable investing, Krull also suggested that investors think long term.
"Because sustainable investing is about investing for the future, [investments are] not always going to be up, especially when value investing is in style," he said. "Over the long term, it should play out. But in short terms, just like we're dealing with right now over the last 12 to 18 months, that value has been in style, you probably will underperform a little bit."
Meta, the parent company of Facebook, turned heads on Tuesday when it announced it will block some ad-targeting, specifically those of a political and religious nature.
This is one of the most direct moves the company has made in order to minimize ad-targeting by advertisers on its platforms. Hastie Afkhami, Head of Digital at S-3 Group, joins Cheddar News to discuss the impact of this move.
Wine subscription service Winc is officially a publicly-traded company after debuting on the New York Stock Exchange. CEO Geoff McFarlane and President Brian Smith joined Cheddar to talk about the decision behind the public offering and noted that its service goes beyond just subscriptions. "We're an omnichannel platform, so the subscription is a great way for us to really generate a ton of data from our customers, launch new products, and market our portfolio," McFarlane said. "But ultimately when we find great products that our customers really love, we want them to be everywhere." He went on to point to distribution partners like Whole Foods, Walmart, and Trader Joe's.
Roy Banks, CEO of Weave Communication, a cloud-based software company for small businesses, joined Cheddar to talk about the company's New York Stock Exchange debut. Banks broke down just how his company helps small businesses manage relationships with their customer base and also laid out how the funds raised will be used to grow the business and its short and long term goals.
Jeff Powell, Managing Partner & CIO at Polaris Wealth Advisory Group, discusses how supply chain issues and inflation will impact consumer spending, and discusses the future of the electric vehicle market.
Sotheby's is getting into the crypto game. The auction house announced it will now be accepting bids in increments of ETH, marking the first time that an auction will field live bids in crypto. This announcement comes just a week ahead of Sotheby's contemporary art auction 'The Now Evening Auction' for two works by Banksy: Trolley Hunters and Love is in the Air. Alex Branczik, Sotheby's Chairman for Modern & Contemporary Art joined Cheddar's Opening Bell to discuss what went into this move.
Jim Worden, Chief Investment Officer, Wealth Consulting Group, talks about the consumer spending headwinds and breaks down the bright spots from Disney's earnings and Rivian's IPO.
Autonomous tech developer Embark made its Nasdaq debut on Thursday via a SPAC merger, making its CEO Alex Rodrigues, the youngest chief executive of a publicly-traded company at the age of 26. He joined Cheddar's "Between Bells" to discuss what led to the IPO and what it means for the trucking industry as it looks to navigate ongoing supply chain issues. "I think there are really three major benefits to autonomous trucks. You think about the benefit from an efficiency perspective, from a safety perspective, and from an environmental perspective," Rodrigues noted.
AppHarvest CEO Jonathan Webb joined Cheddar's "Opening Bell" to talk about the company's Q3 earnings, stating sales data showed the indoor farming tech firm remained on track with its 2021 outlook. Webb also discussed a new campaign called "Fight The Food Fight," to encourage consumers to support a more resilient, sustainable food system.
